Many adults feel unprepared to broach the subject of personal finance with kids because we never received a useful financial education ourselves.
A lot of advice for parents asks you to teach kids certain financial habits, like saving, investing and dealing with debt. But this isn’t different from asking parents to teach kids the birds and the bees — if you didn’t learn it, you can’t teach it with confidence. For the details, rely on financial education resources, and don’t be afraid to learn together with your kids.
It’s not important that you be an expert in financial education. What’s important is that you start the conversation. Avoiding money talk leaves kids to draw their own conclusions, likely from incomplete information.
“Kids are always watching and learning from their parents,” said Melinda Wenner Moyer, a science journalist and author of "How to Raise Kids Who Aren’t A**holes." “From the time they’re babies, they are essentially little social detectives. They want to understand how the world works and how they should act.”
Similar to other taboo subjects like race, sex and death, money is part of life whether you talk about it or not. Kids in your life will pick up on your relationship with money and develop habits based on their interpretation of it.
“Kids are always watching. Seriously, always,” said early childhood expert Janice Robinson-Celeste. “They’re like little sponges, soaking up every conversation, action and even the unspoken stuff, like body language or the vibe in the room. We might think some things go over their heads, but they pick up on way more than we realize.”
If you’re not talking with kids about money, here are some unintended messages they might be picking up:
Message #1: Money is shameful
“When parents talk to kids about money, they communicate to kids that money isn’t a shameful or taboo topic,” said Wenner Moyer. “It makes them more comfortable discussing the subject with others.”
Avoiding the topic reinforces the belief that money is shameful, laying the foundation for the shame our culture places onto how people earn and spend money as adults.
“Kids are often being exposed to these topics anyway, through their peers, the media and overhearing conversations,” said Wenner Moyer. ”So if we don't talk to them about these issues, all we’re doing is ensuring that the information they’re getting is incomplete and sometimes woefully inaccurate.”
Message #2: Money is scary
Your kids probably pick up on your money stress, even if you don’t mention it, the experts said.
“If [kids] see parents spending frivolously or constantly stressing about finances, they might adopt those habits or anxieties themselves,” said Robinson-Celeste.
Talking about the financial challenges your family faces can offer kids context and help them understand your money moves. Leaving issues unspoken lets them only feel the fear you exhibit, which could leave them feeling like dealing with personal finances is necessarily scary.
Message #3: People get what they deserve
“Kids often make unfortunate inferences about money and inequality if parents don't provide them with accurate information,” said Wenner Moyer.
Research shows that even young children pick up on markers of wealth and use those to draw conclusions about a person’s competence, popularity and work ethic. If you don’t provide the context about systemic and structural inequalities, those observations can lead them to believe everyone who’s wealthy has earned their wealth and vice versa.
“These ideas ultimately cause kids to accept inequality as fair,” said Wenner Moyer, “especially when they’re on the privileged end of it.”
Message #4: Men are better with money
Wenner Moyer shared that studies find parents talk to boys about money at a younger age than they do with girls. They continue to talk about money more with boys throughout their childhoods. Other research shows that boys tend to be slightly more proficient in financial literacy, and women are twice as likely as men in adulthood to have negative feelings about money.
“Because of this, the conversations parents have with their daughters about money are especially important,” said Wenner Moyer.
Like every other way we embed gender norms in children, subconsciously favoring your sons over your daughters in money talk can not only leave girls less prepared for money management but also set them up as adults to believe they’re less competent with money than the men in their lives.
